PEORIA — Bradley University’s decision last month to trim $7 million from a $175-million annual budget due to a decline in enrollment was just the latest indication of changes sweeping across higher education.

In Illinois, most state universities as well as almost all community colleges face continued enrollment declines.

Aside from the rising cost of a college education and mounting student debt, colleges face another problem.

“There’s greater competition for a dwindling number of students,” said Tony Bankston, dean of admissions at Illinois Wesleyan University in Bloomington.

More bad news for colleges: The number of high school graduates in Illinois will continue to decline. A study performed by Western Illinois University that reported 166,000 high school graduates in the state in 2011 predicts the number of graduates will be 158,000 by 2015.

With fewer high school graduates — not just in Illinois but across the country — more colleges are recruiting from the Chicago metropolitan area, historically a rich talent pool for Bradley and other central Illinois schools.

Bankston says recruitment, particularly by schools from the Northeast, has “exploded” in Chicago. Ten years ago, where five or six schools did most of the recruitment in Chicago, now 120 schools are involved, he said.

But Illinois schools face other problems, said Andy Borst, dean of admissions at Western Illinois University where enrollment dipped 4 percent last year to below 12,000 students between the school’s two campuses in Macomb and the Quad Cities. The state’s financial problems mean greater volatility when it comes to grants, he said.

Illinois is also losing students to other states, said Borst. “Coupled with the fact that state funding reductions have caused us to increase our tuition prices, other flagship universities can charge an Illinois student out-of-state tuition and he or she will still pay less than most Illinois in-state tuitions. We are, in fact, pricing ourselves out of the market,” he said.

Borst said he’d heard reports that Illinois students will make up 40 percent of the freshman class at the University of Missouri this year.

Community colleges are also dealing with changes. Illinois Central College — with campuses in Peoria and East Peoria — has seen three successive years where admission has declined, said school president John Erwin.

“I can predict that enrollment at ICC will be down 5 percent this fall,” he said, anticipating enrollment somewhere between 10,500 and 11,000 students.

But Erwin has seen enrollment fluctuations before. “We’ve had as many as 13,500 students (in 2005) when we were bursting at the seams,” he said.

Since the acquisition of its north Peoria campus, the former Zeller Zone Center, the college has seen the need to reduce its footprint, said Erwin, pointing to ICC’s exodus from Downtown Peoria next year.

“We’re in a better place with taxpayers as we right-size ourselves,” he said.

It’s not just a matter of brick-and-mortar buildings when it comes to education, said Erwin. While ICC’s enrollment may have declined in recent years, enrollment for online classes has increased, he said.

“It’s no longer the traditional classroom. Students are taking advantage of access,” he said.

Online growth has also been a key reason why the University of Illinois at Springfield has bucked the downward trend of enrollment at state schools, said Ray Schroeder, the school’s associate vice chancellor for online learning.

“Over the years, the online programs have grown to serve more than one-third of our students,” he said, indicating the school’s 1,650 online “majors” from 48 states and a dozen foreign countries helped swell the UIS enrollment to more than 5,000.

“As a result of the growth of the online student population, enrollments at UIS have continued to grow when enrollments at other universities have stagnated or dropped,” said Schroeder.

“Generally, those universities that have embraced 21st century approaches such as online learning continue to thrive despite the challenges of higher costs and lower governmental subsidies,” he said.

Another example of that growth is Western Governors University, an online college based in Salt Lake City with 46,000 students nationwide — 950 in Illinois.

“The average age of our student is 37. We’ve been growing at 30 percent annually for the last several years,” said Allison Barber, the school’s chancellor.

“Our tuition is $6,000 a year because we have no buildings, no sports teams.

“We offer degrees in four areas: business, information technology, health professions and education. We offer both bachelor’s programs and master’s degrees,” said Barber.

“Our secret sauce is that every student is partnered with a faculty member,” she said, noting that the school employs 500 faculty members nationwide.

Barber makes three predictions regarding the future of a college education in this country: the traditional university will expand to embrace and engage online programs; competency-based education will continue to grow; and, students will drive the debate.

Some have made dire predictions on the future of colleges, such as Harvard University business professor Clayton Christensen’s suggestion that half of the country’s universities will be bankrupt in 15 years.

“While some have called this alarmist, the point is that higher education is facing significant enrollment and financial challenges that will result in some dramatic outcomes,” said Robert Breuder, president of the College of DuPage.

Not all area schools are dealing with deficits, however. Tim Kefauver, vice president for enrollment at Monmouth College, reports a record class for this fall at the Monmouth school of 1,300 students. He points to the school’s strong reputation, an endowment of $90 million and a capital program that has seen $120 million spent on new facilities since 2002.

At Knox College in Galesburg, a school of 1,400 students, Laura Behling, vice president of academic affairs and dean of the college, looks for this fall’s incoming freshman class to be about the same as last year: 400 students.

“We have to keep doing what we’ve been doing for 170 years. Predictions on the demise of small liberal arts colleges have been around for decades,” she said.

Yet Knox remains aware of the changing college environment, she said. “We’re paying attention to online classes. We’re part of a consortium of 14 schools offering an online calculus course,” said Behling.

In addition, some Knox faculty members put lectures online that students watch in advance and then discuss in class, she said.

ICC’s Erwin looks at the changing environment in higher education as a challenge. “ICC will be better because of technology. We’re going to figure this out,” he said.

Steve Tarter is Journal Star business editor. Tarter’s phone number is 686-3260, and his email address is starter@pjstar.com. Follow his blog, Minding Business, on pjstar.com and follow him on Twitter @SteveTarter